March 19, 2014 / 12:25 PM / in 4 years

Bulgaria starts process to revoke power distributors' licences

SOFIA, March 19 (Reuters) - Bulgaria’s energy regulator on Wednesday started a process to revoke the operating licences of three foreign-owned power distributors, in an escalating row that could dent the investment climate of the European Union’s poorest country.

Austrian EVN, Czech CEZ and Energo-Pro were given an ultimatum to pay some 318 million levs ($226.47 million) of money owed to state power provider NEK by Wednesday or risk losing their licences.

“The State Energy and Water Regulatory Commission opened proceedings to revoke the licences for the activity ‘public supply of electricity’, issued to EVN Bulgaria Electricity, CEZ Electro Bulgaria and Energo-Pro sales,” the energy regulator said in a statement.

The companies have denied any wrongdoing, arguing that NEK - which had debts exceeding 2 billion levs last year - failed to repay them the money owed for wind and solar power installations.

Stripping the companies of their licences would be a blow for a sector already hit by the Socialist-led government’s decision to slash household electricity bills twice since taking power in May. The cuts have squeezed foreign distributors as well as local power producers and piled up NEK’s debts.

Slashing power prices could help shore up the government’s popularity and avoid a new round of street protests against high utility bills, which had toppled the previous, centre-right government in February last year. Such bills eat up a large part of household incomes in the country.

Reporting by Angel Krasimirov; editing by Matthias Williams

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